Glasgow-based tanner Andrew Muirhead has seen great changes in the leather industry and to its local environment in its 175-year history, but it faces the future with confidence, buoyed by a determination to continue improving, innovating and walking the same path towards business excellence that it sees its customers taking.

This has been a decade of regeneration in the east end of Glasgow. When the 52 member states of the Commonwealth of Nations held their version of the Olympics, the Commonwealth Games, in the city in the summer of 2014, much of the action took place in this area, traditionally the poorest part of the city. The opening ceremony was at Scotland’s largest football stadium, Celtic Park, whose environs were newly gentrified for the occasion. Across London Road, a newly constructed velodrome appeared, and a new aquatics centre sprang up at nearby Tollcross. Old, low-quality housing came down, new transport links were completed and now the whole area seems rejuvenated.

The Andrew Muirhead & Son tannery sits in the middle of all this and has done since the 1870s, when the Muirhead family relocated its leather manufacturing business to Dalmarnock from the south side of the River Clyde. The company, now part of Scottish Leather Group, was set up in 1840 and was therefore able to celebrate its 175th anniversary in 2015. Nevertheless, a short amount of time in conversation with current managing director, Colin Wade, is enough for him to make it clear that, while he values highly this history, “this pedigree”, the company lives in the present, with a clear view of its future, rather than in the past.

“We are looking forward, not back,” Mr Wade says, “at the good things we are doing now and are going to do in future. We’ll develop people’s full potential, and areas that we didn’t consider as technical parts of the business before are areas in which we will seek to employ graduates, including PhDs, people with environmental science degrees, production management qualifications, business degrees and so on. We’re employing leather science graduates now in different areas of the business, and we have people at the University of Northampton studying at the moment. Previously, people had plenty of vocational training, but the not the graduate qualifications. Now we have several people who are well qualified and are very ambitious.”

Work in manufacturing

“We were finding it hard to recruit qualified people,” Mr MacInnes has said, “so we decided to grow our own. We started a two-year vocational education programme in 2011, which 128 students have successfully taken part in so far. And in 2012 we set up our own apprenticeship academy, for which we are now working with our third cohort. These programmes have won a number of awards in Scotland but we are keen to improve them further. We have aspirations to have the best-trained leather professionals in the business.” Colin Wade is full of praise for the apprenticeship programme and points out that it is boosting all parts of the business: four members of the engineering team at Andrew Muirhead are apprentices and a recently recruited member of the warehousing team is too. He explains that “vast numbers applied” to be part of each of the three tranches, which have brought in ten new apprentices each time. Those who have secured a place are happy: Mr Wade says they know the sky is the limit.

“People working here know that if they want to get on, they can get on,” he continues. “This applies to our hourly paid workers, too. More than half of them have vocational qualifications, external awards that confirm people’s skills and ability to work in real-life (rather than theoretical) conditions. “People have just got stuck into it,” Mr Wade explains, “including the homework they have to do. They know this is what they have to do to get on our radar for when permanent positions become available.” He goes on to point out that, here in the east end, people have witnessed the decline of traditional heavy industry: steel-making, and before that coal mining. The tannery lives on as an old business, but one that is “fit for modern times”, the managing director says, adding: “Things are changing and people here can see that we are rejuvenating the business. There has been a change in the last five years or so and I am excited about the skills-base we have here now.”

Local material

He believes the future of leather manufacturing here is secure for as long as people want to eat red meat, and says the industry is about recycling, preventing animal waste from going to landfill. “And production will continue here,” he insists, “because we have high-quality cattle; there is no point taking a 36-kilo hide with all the hair and fat halfway round the world to make three or four kilos of leather. I know people do that, but it’s not sustainable.” Andrew Muirhead works from wet blue and wet white, processing 3,500 high-quality bovine hides per week. Scottish Leather Group sources most of these hides from Scotland, Northern Ireland and northern England and carries out wet-end processing at its own specialist facilities in Renfrewshire, just to the south of the city. Each of the pieces the Muirhead tannery works with provides an average of 4.7 square-metres of finished leather. Slaughter numbers are steady in the markets the group shops in for hides, and meat from this part of Europe is in demand, domestically and in export markets. “Beef production here is healthy,” Mr Wade says, “and globally meat production is increasing, not decreasing. UK hides are among the best in the world in terms of quality and one issue we have faced, traditionally, is that because of this high quality, the hides have attracted high demand from competitors, mainly buyers in China. That has had an impact on price and on availability.”

Now there is a new set of questions in terms of sourcing this raw material. Since the UK electorate voted in June 2016 to leave the European Union (EU), there is uncertainty about what new trading relationships will look like in the longer term. But the immediate effect has been clear. “The cost of our raw material has gone up by 10% as a consequence of the referendum,” Mr Wade says. “UK hides became cheaper for overseas buyers because the value of the pound sterling fell against the euro by 19% in the six months following the vote. Demand for the raw material increased and the prices went up.” UK tanneries buying in sterling gained none of the exchange-rate advantages of their competitors elsewhere.

Steady levels of 3,500 hides per week mean the Glasgow-based tannery is not among the biggest, but it has no interest in producing “volume for volume’s sake”, the managing director points out. “We’re not competing in commodity areas,” he says. “We try to take peaks and troughs in production out, removing shocks from the system as much as we can. No one wants shocks. We are looking to differentiate ourselves in key markets through service and through technology, for example by using techniques for digital printing on leather to offer mass customisation.” There is capacity to increase production, but Scottish Leather Group as a whole is “risk-wary”, Mr Wade says, and this applies to Andrew Muirhead too (which is probably an important contributing factor to its longevity). 

There is no escaping the uncertainty surrounding the UK’s exit from the EU, or Brexit as it has become universally known. It will affect most aspects of the business, Mr Wade believes. He describes the current situation (in which no one knows exactly when the UK will leave and exactly how its new trading relationships will function) as being in no man’s land. “We are braced for a few bumps in the road,” he explains, “and I’m sure the markets will react, even if only temporarily, but I’d rather they [the politicians] just got on with it.” 

Customer markets

All the material bears Scottish Leather Group’s ‘Low Carbon Leather’ branding and it’s in demand, especially for contract interiors and mass transit projects (for commercial airlines, rail and bus operators). The group classifies its leather as “low carbon” because of award-winning initiatives such as the on-site thermal energy plant it has been running since 2010 at its Bridge of Weir wet-end tannery, taking what was previously waste sent straight to landfill and converting it into energy for heating recycled water for the manufacturing process. Colin Wade describes low carbon leather as “an important part of the mix” for Andrew Muirhead customers and says he wishes all tanners had low carbon leather to offer. “That would weaken our commercial advantage in the short term,” he admits, “but in the long term it would make the leather industry more sustainable.”

Andrew Muirhead numbers world-famous brands among its customers and works hard, Mr Wade says, to keep upping its game to match the standards of its customers in terms of the quality and service. He says: “This factory makes its products using similar standards of exactness and people development to those of the world-class companies that use our leather. Why wouldn’t our factory and our people be similar to theirs? This remains aspirational, but we are striving for excellence all the time.” These customers care where the tannery’s raw material comes from and care about how the finished leather is made; for some of them, at least, price is not the most pressing question.

High-profile contract wins in recent years have included, fittingly, providing leather to upholster the official fleet of buses for the Commonwealth Games in Glasgow in 2014, and before that, Muirhead leather went into all of the official buses for the London 2012 Olympics. The tannery also does government work, with its leather in use in the upholstery in the House of Commons and the House of Lords at Westminster and, more recently, at the Finnish Parliament in Helsinki. “Government work is about networking with the right supply chain and competing sensibly,” Colin Wade says. “Volumes can be quite small and significant extra service can be required, plus a local tannery may be favoured [for political reasons]. So you have to price sensibly.”

Around 70% of the Glasgow tannery’s finished leather goes for export and it has customers all over the world. Europe, the US and Australia used to dominate, but now it ships substantial volumes of finished leather to Asia. As well as agents and distributors around the globe, it has in some important geographies its own people on the ground, market specialists, Mr Wade emphasises: “Not one is a leather professional, but a specialist in seating of some sort, or in the seating supply chain.”

Paths to excellence

Colin Wade’s early leather-industry experience was here at Andrew Muirhead but he left the company in the 1990s and spent ten years working in sales for coatings technology provider Porvair. He returned to become managing director in 2007 and says the company has been working hard since then to raise the levels of excellence. “Our future, I believe, is in being a manufacturer and supplier of components,” he says, “and we have to be excellent in all that we do. We’re good, but we’re not yet excellent. In time, we’ll be best in class because if there’s something at which we cannot be excellent, we’re not going to do it.” Reminders of concepts such as the 5S workplace organisation methodology (sort, set in order, shine, standardise and sustain) are on prominent display inside the tannery. Just as there is no future for a supply chain that unsustainably transports heavy raw material (most of it waste) halfway round the world for processing, he is adamant that tanners “who are not achieving operational excellence” have no future either. He talks of having had to spend most of his time during his first years back in the leather industry firefighting, but he says Andrew Muirhead had a vision of how it wanted things to be and insists that vision has not changed.

Small centres

Part of the managing director’s current strategy is to create small “centres of excellence” among specific teams in different parts of the tannery, starting, he explains with “some of the most challenging parts of the business”. The building is old for this born-again part of Glasgow but not ancient (the main tannery building was largely rebuilt after fire-damage in the 1940s). It has an in-house refurbishment team that is upgrading the facility section by section, paying attention to details such as the beams in the ceilings. To keep the beams visible after upgrading lighting systems, for example, new grid-style ceiling panels are going in. The dyeing department, the factory’s colour kitchen, was one of the first to undergo the transformation.

One seasoned member of the dyeing department, George Clark, has worked at the tannery since leaving school, 33 years ago. He says 60% of the workforce lives within three kilometres of the factory and that the business is well known in the area, but he says he is disinclined these days to tell people he works at Glasgow’s only remaining tannery. “There’s something about the word,” he explains, “that makes people think you do a dirty job. But this isn’t a dirty job; this is a clean place to work. Everything [in the colour laboratory] is clean and tidy; everything is in its place and everyone in the team keeps it that way.” His managing director describes Mr Clark as “a facilitator of change” because he and his colour-mixing colleagues offer an example of how everyone must work if they want to be “part of a company that has a good future”. Yes, an investment in new equipment and a new layout is required, but this “shows people what can happen”, makes the team concerned proud of what it is doing and secures buy-in from other parts of the organisation. “The first push is always hard,” Colin Wade says, “but you have to have a plan and you have to build up some momentum. We have some momentum now.”

Other early steps include setting up the in-house refurbishment team in the first place, with professional decorators and electricians, rather than hire contractors. It has also established an attractive new showroom to demonstrate to customers Andrew Muirhead’s ability to be, in the managing director’s words, “a creator of excellence”. The warehouse from which it distributes its finished leather has also made early progress.

Logic in logistics

A rented warehouse in northern England used to be a key component of Andrew Muirhead’s logistics strategy. Now it runs its own distribution operation from its own site. The facility in England grew out of the need to be able to serve quickly and effectively furniture manufacturers in that part of the world with finished leather for their products. Even when much of this furniture production moved offshore, the company continued to use the warehouse until 2010 when a 1,000 square-metre site adjacent to the tannery in Glasgow became available. “We acquired it,” Colin Wade explains, “and immediately gained a much better loading bay than we had before. We have this huge site, but the loading bay we had opened out onto Dunn Street, a busy road, and every time we had an order to dispatch we caused a traffic jam.” He also explains that finished hides were being transported south on pallets and creasing was something of a problem. Not only is the new loading bay better placed and the attached warehouse a newer building than the rest of the tannery, the system in operation there is up to date too. Matt Prentice, distribution manager, who runs the warehouse team, explains that Andrew Muirhead keeps 150 finished leather articles in its wholesale stock and part of Mr Prentice’s role is to stay abreast enough of “always-changing” trends to keep the company’s best-sellers nearest the front. Hides are hand-rolled and handsomely presented in branded packaging with a twist at either end; each package looks like a giant chocolate cigar. “We want the products that are in most demand nearest the front because each one weighs four kilos and over the course of a working day, it’s a lot of weight for the guys in the team to carry,” Matt Prentice explains. “We’re using pedometers to gauge their movement. We’re waiting until ten orders are in place before picking them all together. We have great systems in place: we see orders coming in from sales and feed the information into the factory and take it from there. We’re simply trying to be as smart as we can be about things, including benchmarking ourselves against world-class companies.”

Long-term relationships

With these world-class companies, as with its suppliers, Andrew Muirhead’s interest is in establishing and maintaining relationships that will last. It wants repeat business “from customers who pay their bills”, Colin Wade says, and long-term supply contracts with suppliers who will deliver what they say they will deliver, who are financially stable and who are committed to the leather industry. “There is no heat or emotion in this,” the managing director continues. “If people want to partner with us, we’re delighted, but there are principles that have served this company well for 175 years and we will not compromise on them.” He goes on to list integrity, honesty, fairness and respect as four of these principles and explains that, by integrity, he means “being straightforward and clear, and doing the right thing”. Andrew Muirhead has “viable alternatives” in terms of suppliers of all the chemicals it buys so as not to become too dependent on any particular company. Price, ethical sourcing and levels of service are all important, Colin Wade says. “And their commitment to technical service in the field matters a great deal to us,” he adds, “and it’s increasingly important as we raise our game. We want them to trust our technicians to go to their facilities as well as having their technicians come here. When they do come here, we need their discretion. We don’t want their competitors to know what’s going on here before we’re ready to talk about it any more than we want our own competitors to know. Sometimes suppliers have come here and been indiscreet, divulging lots of information about our competitors. I have to assume that this means these suppliers are equally indiscreet about us and, frankly, I can run a decent business without that kind of nonsense. This is different from market intelligence; I’m very interested in market intelligence.”

Wet or dry

For the future, he has high hopes for the supplier community. Colin Wade has a firm belief that, one day, leather will be finished “with little or no water”. There is a small, but important piece of history to relate here. He’s talking specifically about finishing, but Mr Wade was a delegate at a conference on the future of the European leather industry that took place in Glasgow in December 2015. At that event, Professor Tony Covington, emeritus professor of leather science at the University of Northampton, said he is optimistic about the use of bead technology in tanning. Xeros Technology Group, a UK start-up that has developed a patented polymer bead system, claims it can save large volumes of water in leather production. Professor Covington said at the Glasgow event that he was restricted by legal agreements in what he could tell delegates and did not mention any technology provider by name, but went on to refer to bead technology as “a new development in which water is replaced by a solid medium in a very different approach” to leather manufacture. At the end of this talk, Colin Wade asked the professor if he really thought it will be possible for companies to replace all water throughout the whole of the leather production process. Professor Covington answered: “In principle, the possibility is there.”

More than a year later, Mr Wade says he feels sure that the use of quite large volumes of water in the tanning process as a whole will remain, but when it comes to finishing, he takes a different view. He explains: “A damp hide is 55% to 60% moisture. We wet it back, then dry it under tension, then we dump a water-based emulsion on it and then dry it again in an oven. We use a lot of energy to dry off the water only to apply water again. It’s a lot of gaining and losing yield; every time you dry a hide, you shrink it and you lose yield. Yes, you can can gain some yield back by staking and wet-stretching, but that’s masking the problem rather than engineering it out. Plus, I wonder about the extent to which all the drying, wetting back and stretching might be weakening the structure of the fibres in the hide.” In general, he insists that any time tanners can take water out of the process, they will lessen inefficiency. “Tanners use plenty of water in tanning, and that’s here to stay,” he adds. “That’s probably true in the dyeing process too. But in coating, I think we have an opportunity to reduce our use of water.”

A printing revolution

He would like to see far more work being carried out to develop a system for printing onto leather, just as we print onto paper today. Andrew Muirhead has already done some work on this to provide a customisation service for aviation and automotive clients, most notably on smaller cut parts such as headrest covers for seats. But if it were possible to pass the leather through the printer fast enough, the managing director is convinced his company and others could cover the whole hide in this way, using specially pigmented inks. “It’s the print head that needs to become faster to make this possible,” Mr Wade says, “and the manufacturers of leather finishing chemicals should be onto this, working with the printing technology companies to make it possible before the printing companies work it out for themselves and become a threat. The print industry is evolving at a very impressive rate and there’s no reason why leather manufacturers should keep spraying or roller-coating emulsion onto hides.”

Savings in waste as well as water (and energy) could be important here. Waste isn’t something that Andrew Muirhead worries about unduly. It’s not a large tanner in volume terms, processes from wet blue and wet white, and feels it does not generate a lot of waste. However, what it does produce can be catered for perfectly by the existing infrastructure in the east end of Glasgow. Owing to the predominance of heavy industry in the area’s economy 50 or 100 years ago, the public system has a high capacity. On site, there is a balancing tank and the company’s technicians carry out filtration, adjust the pH of the wastewater and send it straight into the system. “Scottish Water checks up on us every few weeks,” Mr Wade says, “and I honestly cannot remember the last time we caused them a problem. And just to make it clear, Scottish Water’s standards are among the highest in the world and we operate well within its requirements.” Scottish Leather Group has already made public its acquisition of extra land in Glasgow, adjacent to the Andrew Muirhead tannery. Such are the standards to which the group is working and the capacity of the local infrastructure to cope that it could begin to run wet-end processes here in future if it wants to; increasing dyehouse capability, at group level, is more of a priority at the start of 2017.

Political links

Relations with government bodies in general are strong. The first minister of Scotland, Nicola Sturgeon, visited Andrew Muirhead in 2016 and even tried her hand at trimming hides. On the day, she described the company as “a remarkable success story” with its 175 years of history behind it and “a bright future ahead for its staff”. She linked this to Scottish Leather Group’s expansion plans and said these constitute “a testament to the company’s desire to add to its global reputation for quality and to find new markets for a product that’s made here in Dalmarnock.” Colin Wade says communication channels with local members of the Scottish Parliament are also working well and, at their invitation, he has had the chance to take part in debates on Scottish business at the parliament. The relationship with Glasgow City Council, particularly with city’s provost (mayor), Sadie Docherty, has been equally good, if not better, he says, particularly after the company’s celebration of its 175 years in operation, which culminated in a special dinner and reception at the the main seat of local government, the City Chambers, with Ms Docherty as one of the guests. “We have good links,” Colin Wade says, “but we have to work all the time to keep them good.”

As outlined above, this part of Glasgow is less residential than it used to be, but Andrew Muirhead continues to try to be a good neighbour. An important aspect of this, the managing director explains, is to make a point of having a number of very local companies as suppliers: it buys wood, building materials, metal and print supplies from neighbouring firms. He also has a standing invitation to visit Dalmarnock Primary School, which is just 400 metres from the tannery, once a year, usually to talk to the oldest pupils there just before they move on to high school about work and life choices. And, still on the subject of children, the company has forged close ties to a local charity called With Kids, which runs one centre in Dennistoun, which is a couple of kilometres away from the Muirhead factory, and a newly opened one in Edinburgh. The organisation works with children living in poverty, offering them and their families support through workshops, play opportunities and other activities. “It’s a small charity,” Colin Wade says, “but because it’s small the help we are able to give goes a long way; we can see the difference it makes.” In 2012, he completed a well known long-distance (it’s 150 kilometres from start to finish) walk called the West Highland Way and raised money for With Kids. In subsequent years, he and a group of 20 Andrew Muirhead people cycled 40 kilometres from the factory to Balloch, at the bottom tip of  Loch Lomond, and raised more money. In total, the leather producer has been able to give more than £20,000 to the charity so far.

Label lobby

In response to a question about how committed his customers are to continuing to use leather in the face of ever-intensifying competition from synthetic substitutes, Colin Wade insists he is optimistic. “I’m not sure we should be afraid of synthetics,” he says. “More leather is being sold than ever before. There are more people in the world than ever and that means there are more leather shoes being made and sold than ever, more cars with leather in their interiors, and so on. Leather is, and should be, a luxury product. Other fabrics have been used instead of leather for years, but we can still sell leather; of course we can. But any tannery that tries to compete on price with the cheapest synthetics will fail.” He pays  tribute to group chairman, Jonathan Muirhead, for extensive efforts to impose similar leather labelling standards to upholstery to those that exist in the footwear industry. Mr Muirhead lobbied for years and tried to use his influence as president, between 2014 and 2016, of the leather industry’s representative body in the European Union, COTANCE, to have similar pictograms to the ones footwear consumers are familiar with (and understand readily) introduced to the furniture upholstery and car interiors markets.

“Why couldn’t a car seat have a similar pictogram on a hang-tag?” Colin Wade wonders. “If you’re in the back of a car, even an expensive car, you’ll probably be facing a piece of vinyl. I don’t have a problem with that because leather is a scarce material [and car manufacturers want to save it, not for the back, but for the parts of the seat that car-buyers will have most direct contact with], but there should be clear differentiation. Consumers believe the interior is all leather and that devalues leather. That’s what needs reviewing. Synthetics masquerading as leather are bad news and do damage to the brand of leather; the industry as a whole must continue to fight against that. COTANCE has put a very good case to the EU, but to no avail.”

He says Andrew Muirhead is “not exposed” to competition at the commodity end of the market. Twenty years ago, things were slightly different. UK-based sofa manufacturers had been a good source of business in the 1970s and 1980s. In the 1990s, however, competition among these consumer-facing companies became fierce and it became the norm for them to offer interest-free credit on new purchases. Ticket prices remained static and the financial packages began to matter more to sellers than the sofas. Sourcing from cheaper suppliers overseas was a logical next step for these retailers and, before long, Muirhead started looking elsewhere for growth, not least because buying a new sofa had become a much more affordable option for consumers than refurbishing an old one; not only was the tannery losing out as retailers went for cheaper leather (and then synthetic alternatives), the 1,000 or 1,500 high-quality furniture restoration firms that made a good living in the UK at that time consolidated severely, closing down another seam of business for the company.

The challenges of being a high-flier

Aviation leather, which represented perhaps 10% of Andrew Muirhead’s overall business when the UK furniture market was buoyant, became much more important. Now the company regards itself as one of the world’s leading leather suppliers for commercial airline interiors. This is a position it has had to work hard to achieve. “It’s a fragmented market and is probably a lot smaller than it’s often perceived to be,” Mr Wade says. “Each order requires an on-the-ground interface in several countries. I know that applies to automotive leather, too, but automotive tanners usually have the compensation of higher volumes and far longer programmes. If you want to supply major airlines, you will probably have to be in a position to keep pre-certified, flame-retardant leather on your shelves for 15 years, ready to deliver whenever your customers need the material, without knowing for certain when that might be.”

There are refurbishment programmes, of course, but they are hard to plan. In 2011, a senior representative of a major airline famously told people in the leather industry that, while his company is having to refurbish synthetic upholstery on aircraft seats after about four years, it finds itself able to keep using seats with leather upholstery for up to 30 years. When the leather does need to be replaced, it’s always difficult to find a suitable time. Airlines want planes in the air; any time an aircraft is on the ground, it’s losing the airline money. Often it will decide to carry out the refurbishment when the plane is grounded anyway, perhaps for an unexpected but necessary mechanical repair, carrying out a refit of the interior at the same time because it has no choice but to lose flying time. “Then they may well call forward at very short notice the leather they need for the project,” Mr Wade says. “We’ve had as little as 48 hours’ notice before. To be able to fulfil a request like that, there’s obviously no time for approaching an outside body to certify the leather for flame-retardancy or for toxicity. Therefore, we have had to put ourselves in a position of being able to self-certify and have the leather pre-certified and ready to go. And only we can do that.”

Fortunately, though, a recent experience suggests that senior people in the aviation industry still hold leather in high regard. Before retiring in April 2016, the chief executive of British Airways, Keith Williams, decided to refit all of the carrier’s short-haul aircraft with Muirhead Leather. On signing off on the deal, Mr Williams travelled to Glasgow, where British Airways carries out maintenance of its short-haul aircraft, and Colin Wade had the opportunity to meet him and discuss the refit face to face. “As chief executive, he needn’t have shown that amount of interest,” the  leather manufacturer’s managing director says now. “It was a great piece of business for us, but it you think of what a new aircraft costs and what it takes to run an airline, the cost of our leather was small for it to be something the chief executive was so interested in. It shows that leather upholstery matters to the people who are high up in that organisation.”

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